Thursday, April 6, 2017

What’s the Safest Way to Start a Business in 2017?

The general consensus across the board is that the US economy is continuing its slow but steady rise from the Great Recession that started in 2007. Of course, that entire sentence is loaded with important qualifications: “general consensus”, “slow but steady”… what does it all really mean? Basically, as you probably already know if you’ve found this article, the climate for startups and successful business ventures has never been a sure thing. In fact, it can be downright risky.

Everything you know is wrong.

An article by Jim Clifton, CEO of Gallup, came out earlier this year with some really sobering statistics from the polling experts themselves. It was called, “American Entrepreneurship: Dead or Alive?” and I strongly recommend reading it when you have a few minutes.

The Cliff Notes version, however, is simply this – many of the statistics you hear touted on TV and published online regarding the recovery of the US economy and specifically about US entrepreneurship are misleading. The actual facts show that, although the economy is certainly in a better place than it was several years ago, starting a business and keeping it alive is not as easy now as it was prior to the recession.
This is a bitter pill for many optimistic and excited entrepreneurs to swallow when they pour their heart and soul into a great idea only to find that the money dries up before the business takes off. At this point, although there are tens of thousands of businesses starting up all over the country each year, there are actually a higher number of businesses failing during that same period, so the net outcome is negative.

But there is a safer way.

But that’s quite enough with the doom and gloom because the fact is American entrepreneurs ARE still succeeding in building and growing small businesses all over the country every day of the year.

What we’re finding, though, is that many of them are doing so more cautiously and intentionally than they did in years past. An example of this cautious optimism is the incredible rise of what has been labeled the Fampreneur.

A Fampreneur is an individual who intentionally starts or purchases a business with one or more family members in order to spread the risk and share the rewards. Unlike the more traditional family businesses where one entrepreneur takes the plunge and other family members are more or less absorbed into it if it’s successful, this is an intentional strategy to help ensure the business has a better chance at success over the long term.

In a survey performed in 2014 by BusinessesForSale.com, respondents who had purchased businesses through the BusinessesForSale.com listing service the previous year were asked whether they were running them as family businesses. 54% said they were. When a similar question was posed to individuals who indicated they planned to purchase a business in 2014, the number who planned to run it as a family business rose to nearly 74%!

These same respondents revealed an interesting correlation as to intent: of the group who purchased businesses in 2013, a full 70% indicated they did so because “a good opportunity presented itself.” On the other hand, of the ones planning to buy in 2014, over half listed the fact that this was “a buyer’s market” and they were “optimistic about the economy” as the top reasons behind their decision.

So, this data shows that the average American entrepreneur heading into 2015 was optimistic about their chances of success building a business in the current economy, but were also hedging their bets by heading into the project with family locked in to assist.

That’s the essence of the Fampreneur mentality.

It can work for you too.

So, where do you stand on the optimism spectrum? Are you eager to jump into starting and running a business? Are you confident you can go it alone? Or are you concerned that the going may get tough?

Perhaps becoming a Fampreneur could serve as an excellent compromise. Don’t let the fear of risk steal your entrepreneurial dreams. Take deliberate, strategic action and rely on those closest to you to make it work!